(Adds response from Cannae Holdings Inc and Senator Investment Group)
By Svea Herbst-Bayliss and Ayanti Bera
July 7 (Reuters) – Property data and analytics company CoreLogic on Tuesday rejected an unsolicited $7 billion takeover offer, saying it expected to earn more this year and would buy back more of its stock.
Investment groups Cannae Holdings Inc and Senator Investment Group last month proposed to buy the company, valued at $5.3 billion, for $65 a share. At the time, the offer represented a 37% price premium, but CoreLogic’s shares have climbed and were trading at $68.51 on Tuesday, meaning the offer price no longer carries a premium.
CoreLogic’s board “unanimiously rejected the unsolicited proposal,” board chairman Paul Folino said in a statement.
“Given CoreLogicâ€™s strong momentum, increasing margins, accelerating growth, and multi-faceted value-creation model, we are unanimous in our belief that CoreLogic will be able to deliver significantly more value to shareholders than this opportunistic proposal,” he said.
CoreLogic raised its full-year 2020 revenue forecast to between $1.84 billion and $1.88 billion from between $1.69 billion and $1.73 billion. Analysts on average expected revenue of $1.73 billion, according to IBES data from Refinitiv.
The new financial guidance reflected market share gains and major new business wins as well as the latest estimates of housing market activity, the company said.
CoreLogic said it had boosted its share repurchase authorization to $1 billion. It also said it adopted a short-term shareholder rights plan which, if implemented, would prevent investors from acquiring 10% or more of its common stock, or 20% in the case of certain passive investors.
Cannae and Senator, which jointly hold an economic interest of roughly 15% in CoreLogic, are pursuing a different kind of activism where a hedge fund is partnering with an operating company to buy an entity and then run it, instead of just pushing management to change how it runs the business.
They responded to CoreLogic’s rejection, saying they still hope to engage with the company and maintaining that they have “widespread” shareholder support and could call a special meeting to throw out the current board within three weeks. Last week, they said Bank of America was sure it could arrange financing for the deal.
CoreLogic said it is also worried about conflicts of interests.
“The proposal also fails to address the serious regulatory concerns raised by significant overlaps between CoreLogic and the network of companies associated with Cannaeâ€™s chairman, (Bill Foley), including Black Knight and Fidelity National,” Folino said in the statement.
Cannae and Senator characterized CoreLogic’s guidance and regulatory concerns as “misdirection.” They said they were “committed to signing an acquisition agreement with a â€˜hell or high waterâ€™ provision” and of taking any actions needed to secure regulatory approval. (Reporting by Svea Herbst-Bayliss in Boston, Ayanti Bera in Bengaluru; Editing by Anil D’Silva, Bernadette Baum and David Gregorio)